New Jersey Statutory Update – Part III Banner Image

Healthcare Law Blog

New Jersey Statutory Update – Part III

October 31, 2023

Part III continues to focus on New Jersey statutes that impact healthcare and have been approved by the New Jersey Legislature and Governor. Part III includes legislation on drug pricing, pharmacy benefit managers, and New Jersey’s False Claims Act

New Jersey Expands Data and Transparency System for Prescription Drug Supply Chain

Approved Bill S1615 addresses prescription drug prices and implements new data reporting requirements across the prescription drug supply chain. The Bill requires the Division of Consumer Affairs (the “Division”) to publish emerging trends in prescription drug pricing annually.

Drug manufacturers, including product packagers, repackagers, labelers, relabelers, and distributors, will be subject to the reporting requirements if they increase the wholesale acquisition cost (“WAC”) of: (1) a brand drug by more than 10% during any 12-month period; (2) a generic drug priced between $10 to $100 by more than 40% during any 12-month period; or (3) a generic brand priced $100 or more by more than 10% during any 12-month period.

Manufacturers must provide written notice of such price increases to the Division within 10 days following the effective date and the Division will notify consumers of the increase on its website. Manufacturers must also report to the Division within 20 days of the price increase the following: proprietary and non-proprietary drug names, pricing units, volume, sales, revenue, and annual changes in prescription drug transactions. The Bill provides similar reporting and notification requirements for manufacturers related to market introduction of drugs.

The Bill also imposes reporting requirements on Pharmacy Benefits Managers (“PBMs”), including total rebates, discounts, and price concessions received or negotiated by PBMs with the manufacturer for each drug. The Division may audit the data submitted by any reporting entity at a cost covered entirely by the entity and may require the entity to submit a corrective action plan to correct any deficiencies.

Lastly, the Bill establishes the Drug Affordability Council to review the reports submitted and collect data to formulate legislative and regulatory recommendations to address the drug pricing. Each member of the council must have expertise in healthcare economics, healthcare policy, or clinical medicine.

New Jersey Extends Time Allowed for Involuntary Civil Commitment for Mental Health Treatment

Approved Bill S3929 amends N.J.S.A. 30:4-27.1 et seq. to allow a general hospital, short-term care or psychiatric facility, or special psychiatric hospital to detain a person, admitted involuntarily, for an additional 72 hours from the time a screening certificate is executed. Within 24 hours of admission, the facility should initiate court proceedings for the involuntary commitment and request a temporary court order permitting the continued hold pending a date of the involuntary commitment hearing. This hearing should take place no more than 20 days from the initial commitment.

Prior to this Bill, the facility could not detain a person admitted involuntarily for more than 72 hours; however, under the amendment, if a temporary court order has not been rendered within the first 72 hours, or a temporary court order had been granted, but the admitting facility does not have the capacity to accommodate the person, the facility may detain the person for an additional 72 hours.

The facility may detain them for this additional time if: (1) the person is reevaluated by a psychiatrist at least once every 24 hours; (2) the evaluating psychiatrist recommends the person be detained due to risk of rehospitalization or if the person is a danger to themselves or others; and (3) the person is not detained for a total of more than 144 hours from the time the screening certificate was executed.

The Bill took effect immediately on August 16, 2023, and ends after two years.

New Jersey Revises State False Claims Act to Comply with Federal Law for Enhanced Medicaid Fraud Recoveries

Approved Bill A5584 revises N.J.S.A. 2A:32C-1 et seq., New Jersey’s False Claims Act (“FCA”), to conform with federal law in which the State is eligible for greater recoveries in Medicaid fraud cases.

Under federal law, a state is entitled to enhanced recovery in Medicaid fraud cases if the Inspector General of the Department of Health and Human Services determines the state’s FCA is “at least as effective” as the federal FCA in furthering whistleblower actions. The Inspector General determined New Jersey’s FCA was not as effective as the federal FCA and recommended the State make modifications.

This Bill implements the Inspector General’s suggestions and modifies the State’s definition of the term “claim,” to better align with the federal definition, and adds definitions of the terms “material” and “obligation” to the statute. The Bill also adds language to better understand the remedies available under the federal FCA and the calculations for the State’s share of New Jersey FCA claim recoveries.

New Jersey Increases Medicaid Reimbursement Rate for Adult Living Facilities

The New Jersey Legislature approved Bill S405 to codify and increase Medicaid per diem reimbursement rates for assisted living facilities, comprehensive personal care homes, and assisted living programs.

The Bill provides tiered increases in reimbursement rates to assisted living residences, comprehensive personal care homes, and assisted living programs with a minimum per diem rate of $89.50, $79.50, and $89.50, respectively, for each Medicaid beneficiary under their care. Additionally, assisted living residences and comprehensive personal care homes are to receive an increased per diem rate based on the percentage of Medicaid beneficiary residents at their facility.

Accordingly, a facility with a Medicaid beneficiary population of: (a) 15-30% of the total resident population will receive a per diem rate that is $10 higher than the minimum; (b) 30-50% of the total resident population will receive a $15 higher per diem rate than the minimum; (c) 50-70% of the total resident population will receive a $30 higher per diem rate than the minimum; and (d) at least a 70% of the total resident population will receive a $35 higher per diem rate than the minimum.

The Medicaid beneficiary population percentage will be determined on a yearly basis.

Our Team

Labinot Alexander Berlajolli

Labinot Alexander Berlajolli

Get Our Latest Insights